The Hong Kong Securities and Futures Commission (SFC) is set to lift the ban on retail investors trading cryptocurrencies. The announcement comes after the SFC had previously suspended the sale of virtual assets to retail investors in 2018, citing investor protection issues.
Lifting the ban on retail crypto trading will allow licensed brokers and fund managers to offer cryptocurrency investment products to retail investors. However, the SFC noted that there will be restrictions on advertising and promoting such products to the public. Additionally, the regulatory body will also require licensed entities to conduct appropriate due diligence on their clients to ensure they understand the risks associated with investing in cryptocurrencies. As part of this due diligence, only the largest and most established cryptos are likely to qualify for retail trading in Hong Kong under these proposed regulations.
The decision to lift the ban comes amid a growing demand for digital asset investments in Hong Kong, and follows similar moves made by other jurisdictions such as the U.S. and Canada.
The SFC stated in a press release that they will continue to closely monitor the market and assess the risks associated with cryptocurrency investments. This move could also pave the way for Hong Kong to become a major player in the global cryptocurrency market.
With this new development, retail investors in Hong Kong will soon have the opportunity to invest in cryptocurrencies, which were previously only available to institutional and professional investors. While Hong Kong doesn’t have a huge population on its own, Hong Kong has long been the financial gateway in and out of China. A good deal of Chinese liquidity could flow into Hong Kong as crypto investments–especially among the retail crowd.